Williams, Shell launch US gas processing alliance

The new venture, Three Rivers Midstream, has signed a long-term fee-based dedicated gathering and processing agreement for Shell's production in the Pennsylvania area. The joint venture also plans to pursue gathering and processing agreements with other producers in the liquids-rich region.

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Williams Partners has agreed to launch a new midstream joint
venture with Shell to provide gas gathering and gas processing
services for production located in Northwest Pennsylvania, the
company announced on Tuesday.

The venture will invest in both wet-gas handling infrastructure
and dry gas infrastructure serving Marcellus and Utica Shale
wells in the area.

The new venture, Three Rivers Midstream, has signed a
long-term fee-based dedicated gathering and processing
agreement for Shell's production in the area, including
approximately 275,000 dedicated acres.

The joint venture said it also plans to pursue gathering and
processing agreements with other producers in the liquids-rich
areas of Northeast Ohio in addition to Northwest
Pennsylvania.

Three Rivers plans to construct a 200 million cubic feet per
day (MMcf/d) cryogenic gas processing plant and related facilities, with the location to be
determined at a later date.

The planned large-scale gas processing complex would be
expandable as Three Rivers' business grows. The initial plant
is expected to be placed into service by second quarter
2015.

"This new joint venture builds on our strategy of creating
large-scale infrastructure solutions that will provide Shell
and other producers with access to the best markets for their
natural gas and natural gas liquids, whether they be in the
Northeast or the Gulf Coast," said Alan Armstrong, CEO of
Williams Partners' general partner.

"The system is expected to be connected to two major
proposed developments in Pennsylvania -- Shell's proposed
ethylene cracker (feasibility still being studied) in Beaver
County and the proposed Williams-Boardwalk joint venture to
develop the Bluegrass Pipeline system that would deliver
Marcellus and Utica liquids to the rapidly expanding Gulf Coast
and export markets," he continued." The proposed Bluegrass
pipeline is targeting a late 2015 in-service date.

"Similar to our strategy of creating a significant supply
hub in the dry gas area of northeast Pennsylvania, Three Rivers
will create a major supply hub in northwest Pennsylvania, but
with the added benefit of large-scale NGL pipeline
infrastructure and expanded market options to support wet-gas
production in this area."

Williams Partners will initially own substantially all of Three
Rivers Midstream and operate the assets. Shell has the right to
invest capital and increase its ownership prior to
mid-2015.

Williams Partners' portion of initial capital expenditures
on the Three Rivers plant, not including the gathering system,
is expected to be approximately $150 million. Subsequent
capital investment is expected as the joint venture's business
and scale increases

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